China in the 19th Century (1974)

From the October 1974 issue of the Socialist Standard

In communist theory the feudal era in China ended with the fall of the Manchu dynasty in 1911 — preceded by a period of embryonic capitalism, and followed by the capitalist era. In reality, though this marked the end of Imperial and dynastic China, its economic effects were minimal. But for the 1914-18 war, it is quite probable that Yuan Shih-Kai’s bid to inaugurate a new dynasty with himself as emperor would have been successful; from the founding of the republic, he had the support of the western powers against the revolutionary Sun Yat sen.

The preoccupation with the war in Europe deprived Yuan of foreign support when he claimed imperial legitimacy, and also let in the Japanese as a new predator. After the war the western powers, expecting to return to the status quo, imagined they could buy off Japan by admitting her to the wolf-pack and allowing her to have the former German interests in Shantung province. This was China’s ultimate disillusionment with the west; it sparked off the May the Fourth movement from which Chinese Communism was to spring, nationalism and all. Confident that Japan had been appeased, the western powers went about their business of exploiting China. This was the period of warlordism, which was only a reflection of other rivalries. And when Japan wanted more, the western powers sank their differences and jointly supported Chiang Kai-shek as the best bet for defence against Japan.

During this period, though capitalism waxed fat in China, it was practically entirely western capitalism. Very little indigenous industrial enterprise started up. What did arise was a flourishing finance capitalism. Bankers, direct heirs of the usurious pawnshops of traditional China, were able to negotiate foreign loans and act as agents for raising Chinese capital to go into foreign enterprises. But agriculture continued to account for 90 per cent. of the population, and the torments of the peasants intensified as it was upon their backs that the burden of others’ money-making rested. To speak of this as China’s capitalist era is a delusion.

Before the 1911 pseudo-revolution China is supposed to have been undergoing the pangs of nascent capitalism. It is convenient to start the story of what was happening with the First Opium War of 1840, although it really opens with the Lord Macartney mission in 1793. The western mercantile nations were affronted and indignant at China’s refusal to enter into trading relations with them. China deliberately saw no benefit in foreign trade; to the rapacious young capitalist class this was an incomprehensible denial of the laws of political economy and of God. By 1840, they were prepared to force China at gun-point to accept their trade.

China’s subjugation followed as a matter of course, helped by the degeneracy of the ruling dynasty and civil strife. By 1860, after the sack of Pekin by the Anglo-French Expedition, both the Dragon Throne and the bureaucracy were in despair. The traditionalists interpreted these troubles as the consequence of the Emperor’s departure from Confucian virtue; but there was a more realistic school of thought which held that western force could only be met by Chinese force. They were agreed on the need to maintain traditional Chinese society, but advocated the introduction of western technology so that China could build the only weapons — both military and economic — which the intruders understood. They became known as the Self Strengthening Movement. Their practical problem was the declining revenue into the Treasury.

After the 1860 war the Maritime Customs was set up; it was for a long time administered wholly by western nations, mainly British, with Sir Robert Hart at the head. Its object was to collect payment of the various indemnities charged against China, and to fix low tariffs so that western goods could compete against Chinese products. Western goods were also exempt from internal taxation, so that the revenue crisis was very serious.

At the same time the Taiping Rebellion was raging. The first massive successes of the Taipings were due largely to the incompetence of the Manchu bannermen, who had become effete in a century of peace. The Taipings were eventually defeated with some help from the western nations, and this gave ground for military reorganization. The Manchu generals were replaced by Chinese commanders, some of whom introduced new tactics and were rewarded for their success with provincial governorships. A number of them were sympathetic to the Self Strengthening Movement.

The movement’s first obstacle was the raising of capital to set up modern industries. Generally, liquid capital was in the hands of merchants who were uninterested in the risks of industry; their favourite investment was in land as the means to entering the gentry class. A second obstacle was that no enterprise of any size could be set up without official approval. However, the Court’s own difficulties gave it no alternative but reluctantly to approve of some of the proposals of the Self Strengthened. The Maritime Customs returns seldom covered the indemnities, which increased with every minor incident of a European affronted by a Chinese, and there was the Court’s own extravagance. Something had to be done: industry of a sort came to China.

Despite the merchants’ general reluctance to invest in industry, a few with comprador experience saw that fortunes might be made. Sheng Hsuan-huai was at one time reputed to be the richest man in all China, and his rise to wealth is typical of the small number of merchants who turned to industry. Sheng came from a powerful merchant class with wide comprador associations, and his own family had taken the first step into the gentry class by becoming landowners. He had passed the local examinations for the civil service but failed in the provincial ones; when he became a rich man, he purchased several official positions.

China at an early stage began appointing to office by merit. This was Confucian doctrine, and even in Han times examinations were held; by the Tang dynasty they were firmly established. They produced the scholar élite , bringing a professionalism into the government service that assured continuity in the administration in whatever crisis. In the 15th century, during the Ming dynasty, office purchase was introduced. This was a device to dilute the bureaucracy so that it would not become too powerful, though it was justified on the score of introducing experience in practical affairs. When the Manchu dynasty was in full vigour office purchase fell into disuse, but was revived again during its degeneracy as a source of revenue. Eventually the purchase system so degraded office-holding that the abolition of the examinations, and the abrupt demise of the scholar class, passed by almost unnoticed.

Until Sheng was wealthy enough to purchase office he could claim only a lowly “official gentry” status. He saw the possibilities of enrichment through industry, and during his life controlled at one time and another steamships, posts and telegraphs, railways, ironworks, iron and coal mines, and interests in shipbuilding and cotton-mills. He began with steamships. After the Taiping Rebellion parts of the Grand Canal from Shanghai to Pekin were in disrepair, and there was a serious problem in transporting tribute rice from the south to feed Pekin and the north. Another route had to found. Some of the rice began to be carried by foreign steamships, and Sheng was unable to persuade members of his clan of the possibilities in buying steamships.

Success was assured when the approval of the clan head was given — this made investment by other clan members an obligation. Nobody expected a capitalist’s return on his investment. In fact none of Sheng’s companies ever paid much in the way of dividends, nor was there ever a policy of accumulation and growth (although quite large amounts of capital were required initially, except for posts and railways where the government invested for its own needs). But the investors, by applying traditional Chinese nepotism, could pack the higher offices with clan members and operating the peculation which also was taken for granted, cream off rich personal rewards — to be invested in even more lucrative pawnshops or in land to achieve status.

Sheng was eventually able to ingratiate himself with a provincial governor who was a Self Strengthener. Li Hungchang had been one of the successful generals in the Taiping defeat, and his reward was the metropolitan province of Chihili. He was also Controller of the Northern Ports; he and Sheng were made for each other. They were not unique. Other governors and high officials also tried to build up partnerships with merchants, and the struggles between factions were quite unscrupulous. Li’s patronage was Sheng's good fortune, enabling him to obtain a monopoly of the tribute rice shipments.

In fact in all Sheng’s undertakings the essential ingredient was an official monopoly. He had to reward his patrons lavishly, and the Throne also demanded recompense in “return for Imperial grace”. By employing Europeans almost exclusively as technicians, he showed no vision of a capitalist China. After the Boxer Rebellion, when the dying dynasty traded nominal survival for subservience to the west, he became little more than a super - comprador, though this still enabled him to increase his riches: he became probably the most hated man in China. His son’s biography of him says his aim was to amass a sufficient fortune to ensure the wellbeing of his family for many subsequent generations; this is a worthy Confucian aim but not a capitalist one.

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The social status of the Chinese merchant was like that of the mediaeval Jew; he was despised as a usurer, yet tolerated because no-one could see how the services he performed could be dispensed with. Their wealth, like Jewish wealth in Europe, could always be sequestered. At the same time, the Chinese merchant had greater mobility for escape from his calling. If wealthy enough, he could become a landowner and his heirs qualify for entry into the scholar-gentry class. There was therefore no strong urge for a separate merchant class to struggle for political recognition.

As important as the combination of social mobility with rigid social stratification was the absence of truly free labour as it arose in the west. Although China’s expanding population in the 19th century brought great pressure on the land, there was relatively little urban drift. The family persisted with remarkable stability; every member from the toddler to the aged grandmother had their allotted tasks, with a total interdependence. In the cities handicrafts manufactures were carried on under a family basis. There were also small factories employing families from the same clan operating a joint enterprise.

To be a totally alienated individual was the most terrifying prospect facing any Chinese. It was common for the new arrival in the city, especially when he was alone, to carry an introduction to a secret society. These go back into ancient Chinese history, and some have histories which span centuries as friendly societies, dissident groups, political opposition and resistance bodies, bandits — in fact any cause either to affirm or to deny conformity. The large factory in the Chinese city recruited its labour from the labour boss of the appropriate secret society. The labour bosses had their own territories; in return for the wages he paid over to the society boss the labourer received enough rice just to keep alive, adulterated opium to make his misery just tolerable, and a minimum of rites for the comfort of his spirit when he died.

Inescapable despotism, abysmal living conditions and low capital investment made a strong propulsion for Chinese people to get out of China if they could. In the 17th and 18th centuries it was a capital offence for a Chinese to leave his homeland; many, nevertheless, took their heads in their hands and went to the Philippines. As early as 1855 Australia restricted Chinese immigration. Subsequently New Zealand and South Africa legislated for their exclusion, and the first restrictive immigration laws in the USA concerned them. Canada did the same. Chinese went to the East Indies, Malay, Burma and anywhere open to them. The greatest wave, however, was in this century, started about 1900 by the construction of the Russian railway across Manchuria and the large expenditure of the Russian army of occupation. When the Japanese took Manchuria in 1932 emigration was re-stimulated by Japanese recruitment and apparent “opportunities”; altogether, from 1900 to 1945 the Chinese population of Manchuria grew from 10 million to 40 million. It hardly needs saying that wherever they have gone the Chinese have found only what capitalism offers to the rest of the world’s population. Peasants went to the cities and became indentured coolies, and left — to become cheap labour all over the world.

Mary B.